A rep from Heartland keeps coming down and wants me to switch over. This time he left a contract for me to look at and it states:
Visa/MC Discount Rate 60% Trans Fee Dial 6.5 cents.

I know the 6.5 cents is Heartlands fee for each swipe of a credit card, but what is the 60% Discount rate?

Also, this is for a 3 year contract. No annual fee. and a Monthly service charge of $15

Re: Question about Heartland Credit Card "Discount Rate

Does it say 0.60% or 60%?

0.60% is probably what it is. This would be 60 Basis Points above cost.

Basis Point Explanation 1.00% = 100 Basis Points
another way to look at it is 6 cents per $10 processed.

example: $30 Signature Check Card Transaction will breakdown as follows

$30 x 1.03% + 15cents + 0.0925% (Cost(Interchange and Assessment) owed to the Issuing Bank and VISA) = 48.67 cents
PLUS $30 x 60 Basis Points = 18 cents Plus 6.5 cents-----> 24.5 cents (Processor Charge to handle the money)

Total Charge = 73.17 cents for an effective rate of 2.5%
Check Cards should have an effective rate closer to 2.1% or lower

60 Basis Points above cost is NOT very competitive. You can do better from your existing provider, if not I can do better for you.

Re: Question about Heartland Credit Card "Discount Rate

OK, here’s the scoop.

The “discount rate” IS .6% for Visa/MC
And the “Trans Fee” @ $.065 is broken down as $.045 to Visa/MC/Amex/Discover and $.02 to Heartland

His main concern is getting the overall fee’s (everything from card swipes to batch fees (if there are any) to mo. service charges and so on) down to under 3%, between 2.8-2.9% (which is said he would put in the contract).

With my current processor (NorthAmerican Bancard) he looked at my average statements and figured up that Iâ€™m paying around 5.75%

I’ve never heard of a place that goes by overall %. Is this guy crazy or what?

Re: Question about Heartland Credit Card "Discount Rate

He’s not necessarily “crazy”. Effective (Overall) Rate is used as a barometer to quickly determine if a processor is capable of saving you money. Depending upon average ticket, an acceptable Effective Rate would be anywhere from 2.1% up to 3.2%.

A higher average ticket will typically have a lower effective rate and visaversa for Low Avg Tickets.

Re: Question about Heartland Credit Card "Discount Rate

He figured up that i’m getting 5.75% from my current place…
I’d like to double check his figures.

Do I just add up every single fee on my statement and compare that to the overall Sales?

Here is what I have off of a statement.

Total Sales $7359.55
Discount $159.34
Varience: $.54
Net Deposit: $7200.21
Surcharges: $75.47
Other Fees: $97.23

So, i figure
Total Sales $7359.55
Total Fees $332.58
Thus 4.5% which is’nt as high as his 5.75% but still
My ave. ticket for this month is $23.10

Correct?

Also, for everyone wondering what all the “fees” include, heres a quick breakdown of what i got here
----------Discout: Includes---------
Disc Rate item Rate
Visa 1.59% $ .10
Vibs 1.59% $ .10
Vdbt 1.59% $ .15
Visp 1.59% $ .10
MC 1.59% $ .10
MCbs 1.59% $ .10
MCbt 1.59% $ .15
MCwc 1.59% $ .10
MCec 1.59% $ .10
For a total of $159.34

---------Surcharges------------
Non-qualified $36.77
Mid-qualified $38.70
For a total of $75.47

------------Other Fees------------
Rate
AMEX $.25
DISC $.25
VISA $.19
MC $.19
Batch Header Fee 1 $.35
Batch Header Fee 2 $.35
For a total of $97.23

Re: Question about Heartland Credit Card "Discount Rate

Actually, based upon what you have listed, I can probably offer you better rates.
Either on a Cost Plus program or on a 4 Tier Pricing program.

I will recomend either one or the other depending upon which one will save you the most amount of money.

Since every merchant in different and rates are custom I can’t list the rates on this site.

please fax me a current statement along with your email address and I will send you a side by side analysis.
Please BlackOut any sensitive information on your statement (deposit account and Merchant Number) I ask this so you will feel compfortable sending me your information.

My fax number is 512-287-4876

Looking forward to determining if we can help you reduce some overhead.